Blue Apron Stock Surges After Beyond Meat Partnership Announcement
Blue Apron Holdings Inc. saw its best day in six months after announcing a tie-up with a hot brand: Beyond Meat Inc.
The struggling meal-kit company will begin introducing products from the alternative-meat startup on its menus in August, New York-based Blue Apron said in a statement. The shares rose as much as 22% on Tuesday, their biggest intraday gain since Jan. 15.
The tie-up may breathe some fresh life into Blue Apron, whose stock has plummeted more than 90% since its 2017 initial public offering turned out to be one of the worst-performing in recent history. Meanwhile, Beyond Meat shares have gained almost seven-fold since their May debut as faux meat has taken off across restaurant and fast-food chains. Beyond Meat extended those gains Tuesday, adding as much as 1.6%.
Blue Apron’s struggles stem from the meal-kit industry’s challenges attracting and retaining customers. Although subscriptions were originally marketed to people who wanted to cook but didn’t know what or how, it was soon beset with complaints: The meals were too expensive, you had to plan ahead, and people felt guilty throwing away all the packaging required to keep ingredients fresh. The nascent meal-kit industry found luring and retaining customers required margin-eating discounts and often didn’t work.
In a bid to reinvigorate growth, Blue Apron got inside brick and mortar retail, but Costco Wholesale Corp. ultimately dropped the meal-kit boxes to make space for seasonal products.
More must-read stories from Fortune:
—Meet the A.I. landlord that’s building a single-family-home empire
—You might have longer than you think to invest for retirement
—Will the Fed cut interest rates to prevent recession? 6 predictions
—Schwab’s ‘Project Bear’ uses A.I. to predict when investors are getting nervous
—When the next recession hits, four good things could happen